The Bangladesh government has unveiled a comprehensive energy audits programme for major industries as part of a wider overhaul of the country's power sector, aiming to reduce energy waste, cut dependence on imported fuels and improve the long-term financial sustainability of electricity supply.
The measures, outlined in the national budget, place greater emphasis on industrial energy efficiency by promoting energy-saving technologies and requiring designated consumers to optimise electricity use. The initiative comes as Bangladesh faces rising power generation costs amid declining domestic natural gas production and increasing reliance on imported liquefied natural gas (LNG).
Gas remains the backbone of Bangladesh's electricity system, accounting for more than 40 per cent of installed generation capacity. As domestic reserves continue to decline, the country has become increasingly exposed to volatile international LNG prices, placing additional pressure on electricity tariffs, government subsidies and foreign exchange reserves.
To reduce reliance on imported fossil fuels, the government plans to accelerate investment in renewable energy while making greater use of indigenous energy resources. According to the budget document, investors will receive incentives to manufacture renewable energy equipment locally, including solar panels, wind turbine components and battery storage systems.
Bangladesh has set a target of generating 20 per cent of its electricity from renewable sources by 2030. That share is expected to increase to between 30 and 50 per cent by 2050 as part of the country's long-term energy transition strategy.
The government plans to expand rooftop solar installations, carry out wind resource assessments in coastal areas, develop utility-scale solar projects and pilot waste-to-energy generation. It also intends to prepare a National Energy Storage Roadmap and improve grid flexibility to accommodate a larger share of renewable electricity.
Alongside the transition to cleaner energy, the government aims to increase national electricity generation capacity to 35,000 megawatts by 2030 while expanding the transmission network to 25,000 circuit kilometres.
The budget says construction of the 2,400MW Rooppur Nuclear Power Plant is progressing rapidly. Fuel rods have already been loaded into one reactor, with around 300MW expected to be connected to the national grid by August 2026. The first reactor is projected to deliver its full 1,200MW capacity by January 2027.
The government said its long-term objective is to build a modern, affordable, uninterrupted and environmentally sustainable electricity system capable of supporting Bangladesh's growing economy.
The budget document also attributes rising electricity generation costs to years of unplanned energy policies, corruption, rent-seeking, mismanagement and irregularities. It alleges that capacity payment mechanisms enabled significant financial misappropriation and capital flight, while several large-scale power projects signed under the previous administration included contractual provisions that imposed costly long-term financial obligations through expensive electricity purchases and fuel imports.
Heavy dependence on fossil fuels has further increased production costs, the document says.
As the gap between electricity generation costs and retail tariffs continues to widen, government subsidies for the power sector are projected to exceed Tk 40,000 crore during the current fiscal year.
Although Bangladesh's installed electricity generation capacity has reached 28,919MW, including imported electricity and grid-connected renewable energy, the government acknowledges that delivering reliable, uninterrupted and high-quality power remains a major challenge.
To address these structural weaknesses, the government has prioritised reforms across electricity generation, transmission and distribution through short-, medium- and long-term plans.
The reform agenda includes strengthening transparency and accountability, identifying those responsible for corruption and enhancing sector-wide monitoring. Authorities also plan to retire inefficient power plants, modernise viable facilities and adopt a least-cost electricity generation strategy to improve operational efficiency.
The budget proposes reviewing capacity payments and power purchase agreements to strengthen financial accountability while modernising transmission and distribution networks through smart grid technologies designed to reduce technical and system losses.
The government also plans to expand electricity access in remote and island communities and says future power plants will be developed through competitive bidding to help keep electricity tariffs affordable.
Grid modernisation will include underground distribution networks and substations in metropolitan areas, while a draft Power Sector Strategy Paper (2026–2050) proposes a balanced energy mix, least-cost generation planning and the adoption of advanced technologies such as Supervisory Control and Data Acquisition (SCADA), Geographic Information Systems (GIS) and Advanced Metering Infrastructure (AMI).
In addition, the process of obtaining new electricity connections and paying bills has been fully automated to improve customer services.
Through stricter industrial energy audits, accelerated renewable energy deployment and broad governance reforms, the government aims to build a more efficient, resilient and financially sustainable power sector while reducing fuel import dependence and strengthening Bangladesh's long-term energy security.
